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It warned that windfall taxes risk accelerating the decline of North Sea oil and gas production so fast that output will fall by up to 70pc by 2030, leaving the nation increasingly reliant on imports.
Criticising the windfall tax, and Labour’s plans to increase it, he said: “Loss of investment means loss of jobs and skills for the energy transition.”
Mr Wheaton suggested 100,000 of the 200,000 jobs linked to the industry were at risk of disappearing by 2029, with the UK importing 80pc of its gas before the decade is out.
The US oil giant Chevron has announced it will quit the North Sea after 55 years, the day after Jeremy Hunt turned down industry pleas for support at a private meeting.
Chevron said that it had decided to leave the region following a review of global operations to determine “whether assets are strategic and competitive for future capital”. The company insisted this was not connected to Britain’s tax regime.
It came a day after Mr Hunt rejected calls for respite from a windfall levy that has driven up the tax on oil profits to 75pc.
Industry leaders told Mr Hunt that there was “one last chance” to halt a “catastrophic” decline in investment in UK waters that risks reducing oil and gas output by at least 50pc by 2030.
However, the Chancellor is understood to have made no promises to change tack – pointing out that Labour’s threats to increase the windfall tax by another 3pc and to cut investment allowances should they win the election, were the key deterrent to investors.
The meeting was attended by most of the North Sea’s major operators, including Shell, BP, Harbour Energy and Ithaca Energy.
Chevron was not in the room but was briefed on the outcome by industry body Offshore Energies UK. The company claimed the timing was coincidental.
A spokesman said: “Chevron’s announcement is not related to recent announcements relating to the UK windfall tax. The announcement relates to assessing a global portfolio that provides best shareholder return.”
Chevron is the world’s third-largest oil company and is one of the last major players still in the North Sea. Exxon left in 2021 and others such as Shell and BP have sold off many of their assets.
The company is to sell its 19.4pc stake in the Clair Field, which is 50 miles off the coast of Shetland and is the largest in UK waters with an estimated eight billion barrels of oil extending over 85 square miles.
It will also dispose of associated assets including interests in the Sullom Voe Terminal, the Ninian Pipeline and the Shetland Islands Regional Gas Export pipeline.
The deal is expected to raise between $800m (£633m) and $1bn once a buyer is found.
Chevron was among the first oil companies to drill in the North Sea in the 1960s, but has since pulled out of exploration and production after offloading its drilling assets in 2019. Analysts say that the North Sea’s output is already in decline because the biggest oil and gas fields have been drained – so finding and extracting what remains is already becoming more expensive.
They warn that burdening the industry with extra taxes is bound to be a deterrent to further investment – pointing to a similar cutback by Harbour Energy, the UK’s biggest oil and gas producer, which has halted all North Sea investment.
Chris Wheaton, an analyst at Stifel, published a new analysis of the North Sea’s prospects on Wednesday entitled: “Will the last energy company to leave the North Sea please turn off the lights.”
I think Millwall are more popular than us.
This is than the facts AIOK provided.
The US oil giant Chevron has announced it will quit the North Sea after 55 years, the day after Jeremy Hunt turned down industry pleas for support at a private meeting.
US oil giant quits North Sea as Hunt refuses to scrap tax
Chancellor rejects industry calls for windfall levy respite as Chevron leaves region
Jeremy Hunt, we love you so!
https://www.telegraph.co.uk/business/2024/05/16/us-oil-giant-pull-out-north-sea-industry-meeting-hunt/
I was under the impression that ML only had until 30th June 2024 to buy £15m. After that the company would either extend the time period with ML (but no guarantee) or move it to another company
If ML don’t buy on higher volume days like yesterday then how the hell are they going to buy on low volume days and they are now the norm. The trading days left are ticking down.
158 days left =£72300 to spend each and every day going forward.
So far they have only managed a average spend of £35k per day
They need to ramp up
Chevron is gearing up to sell its remaining oil and gas assets in the North Sea, marking the energy giant’s exit from the region after more than five decades.
The American energy super major, which is the third-largest in the world by market value, confirmed on Thursday that it will market its assets in the basin, which may or may not result in a deal.
The sale could raise up to one billion dollars (£791 million), and the process is expected to be formally launched in June, reported Reuters, citing multiple industry sources.
Chevron was among the first oil companies to drill in the North Sea in the 1960s, but has since pulled out of exploration and production after offloading its drilling assets in 2019.
The latest planned sale would see it pull out of its remaining interests in the region, including a 19.4% stake in the Clair oilfield, west of Shetland.
It comes after a portfolio review, the company said, and follows a trend of Chevron selling its legacy assets to focus on new low-cost projects.
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The Clair oilfield, the largest in the British North Sea, is operated by BP and produces about 120,000 barrels per day.
The sale would also involve offloading Chevron’s interests in the Sullom Voe oil terminal, also in the Shetland Islands and operated by energy company EnQuest.
That includes the Ninian pipeline and SIRGE pipeline systems which are both linked to Sullom Voe.
A Chevron spokesperson said: “As part of Chevron’s focus on maintaining capital discipline in both traditional and new energies, we regularly review our global portfolio to assess whether assets are strategic and competitive for future capital.
“A portfolio review has been completed and a decision has been taken, to initiate the process of marketing Chevron’s 19.4% non-operated working interest in the Clair Field and associated assets in the UK North Sea.
“This includes various working interests in the Sullom Voe Terminal, the Ninian Pipeline, and the SIRGE Pipeline.
“The process is expected to take multiple months and may or may not result in a sale.”
The only way to turn sentiment and to get a decent share price performance is by the company delivering and by constant returns. Let's be honest : looking at our history, you must be more than a hard dyed contrarian to consider an investment. Abyssmal share price performance, no growth, a few bad investments à la Alma Galia, no returns in form of buybacks or dividend in more than a decade, come to shareholders cap in hand to fund Golden Eagle -buy @21 pence, which now the company wants to be sold, and especially operating in a jurisdiction where the Government turns the screws on the sector beyond reason and belief. No wonder analysts have no eye for the gigantic debt reduction. They have no eye for the future. By the way : f*** analysts! I will mention a glaring example of their recommendations' value. All will have noticed that gold is near all time highs....The gold company whose shares have performed best by far (from $0.55 to over $9.00 since 2015) is Southafrican Harmony (HMY), that has had "hold" "reduce", "sell" and "strong sell"-recommendations since 2015, not a single "buy"-recommendation. What the company did have, was a strong balance sheet, though. With the FCF we will be making, i hope AB pushes the buyback-button to make 'em scramble for shares.
Krak. Windfalls are being enjoyed by Supermarkets, Banks, Defense Contractors el at, we’re now just being punished for political reasons. Depressing I know !
In Jefferies defence, they have been off point on this all the way haven't they. I thought we'd of been at 20p after the stockholme delist. Feels like a lot will be chasing this onto new highs. FCF will be moving the SP on it's own soon enough, that's before anything else is sold to truncate that timetable.
Any info regarding this? Got some serious volume going back in April. Are the company holding back info until the update at the end of the month?
Hoping to see someone from Jeffries at the AGM. Will bring my handcuffs !
Stupid Jeffries,
We already hit 17p for a few minutes on the open yesterday.
Stupid forecast.
Should be 20p+ forecast
Jefferies raises EnQuest Energy price target to 17 (14) pence - 'hold'
Https://www.telegraph.co.uk/business/2024/05/16/motorists-warned-petrol-car-shortages-electric-car-targets/
“The issue you’ve got is fleet demand for battery electric vehicles is very strong due to tax incentives, but retail demand [among private consumers] is weak.
“So if you can’t grow the battery electric vehicles to hit the percentage, the logical thing to do is to reduce the petrol and diesel supply.
“If you choke off petrol and diesel supply, then clearly I think prices probably will go up and actually used car prices definitely will go up.
“We could get to the situation where somebody walks through the door wanting to buy a petrol car and we might not be able to supply one.”
Me too, spread being opened up to choke off buyers put up my bond income into some more equity, may be wrong but 20p must be coming to fill ML brief.
R, the statement has a big hole which is measurable ( cut bills for good!) err with gas UP, wind subsidies UP, inflation UP, wages UP, Transmission network costs UP & nuclear UP ( a creek) its likely in 2029 well see bills UP ! Even the £10bn wft as direct payments won't work ( unless it's means tested with child benefit ,pension credits etc)
Are ML deliberately putting pressure on the SP, I suppose its their job to buy shares as cheap as possible
I want to know what the windfall is ? Because oil Prices are normal and have been all along.
Bought a few more this morning at some point our political leaders and wannabes will wake up to energy security not just giving it lip service. I guess they watch the news. Worries me if not them.
Good and bad. This from the Telegraph:
"The fourth Labour promise reads: “Set up Great British Energy, a publicly owned clean power company, to cut bills for good and boost energy security, paid for by a windfall tax on oil and gas giants.”
It is notable that the distillation of Labour’s energy position for the pledge card focuses on reducing bills, and on energy security. No explicit mention of hitting the Net Zero target is made."
We will be frozen until the details of "paid for by a windfall tax on oil and gas giants" means - well most NS producers can hardly be described as "giants".
Could have bought a lot more yesterday.
Looks like Ed’s breadcrumbs are being eaten and he’s lost his way … Starmer now just going to set up GB energy !!! Costs about £12 @ last count … not even a round in spoons for the fab free :-)
I’d already seen that on X, romaron, and replied:
“Will UK jobs go overseas if the UK, while still having to import oil and gas, extracts less oil and gas than it could because Labour’s fiscal and licensing policy drives investment away?”
Who knows, tho, if any saddo actually reads my reply :)
This came up on Ed Miliband’s “X” feed: “With our abundant natural resources, Britain can be a world leader in new industries. But we are being let down by a clown-car government that is letting jobs go overseas and waving the white flag for British industries. Labour says it is time for change...” using this Press release and Report as the reasoning: https://www.ippr.org/articles/manufacturing-matters
The language is very studenty and JSO so there is a possibility that Ed wasn’t the author as he probably has one of his intern/Spad wonks tasked with keeping the faithful informed.
I’d never heard of IPPR and it has NO scientific weight or even practical experience. It is an ‘independent’ charity and is purely political. It compounds and adds to the lies already in circulation. The five authors are kids who have no practical experience and two are Italian. They aren’t scientists. Dreamers sure.
So far another “RomaRant” but I’m spotting fault lines everywhere I look. The Report states that “The contents and opinions expressed in this paper are those of the authors only.” Thank gord for that and it has deniability written in, especially for Ed I imagine.
*There are 46 pages in the report. It says NOTHING. I’m always amazed at the resilience of these “charities”. What are they good at, apart from raising money.? What benefit do they bring to society? Future jobs for JSO veterans maybe?
This report would be ripped apart by any half decent CEO in the energy business. More tellingly is this the best that Ed can find to support his cause?